Inflation – Deflation – Stagflation?

Not being an economist and certainly not following any of the economic “experts”, I wanted to provide information on inflation, deflation and stagflation. It seems by reading the pure definitions that we continue to have mixed signals from government and various interpretations from the experts. Remember, the experts predict and then proven right or wrong several months later after data is compiled for verification.

Here is my take on the economic cycle and where we are headed:

Inflation – the information and data would indicate inflation is on the rise. It seems logical to me that inflation would increase after a long period of low inflation. It is the economic cycle. How high will inflationary pressures go and will we experience hyperinflation is the question.

As an example: flat screen TV’s. There is an oversupply if you believe the media and prices will come down sharply for the holidays. Will you buy a new flat screen TV or will you say “nice but not necessary”?


Deflation - from Wikipedia, the free encyclopedia

“A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price”

Doesn’t this definition represent our housing market? Housing prices continue to drop although less drastic than previous months. The market will be flooded again with foreclosures after the banks work through their own “papergate”.


Stagflation - From Wikipedia, the free encyclopedia

“In economics, stagflation is the situation when both the inflation rate and the unemployment rate are high.”

Inflation is here.
Unemployment remains high at 9.6%. Although I do not track unemployment benefits, I am sure there will be a point in time when the 99 weeks of unemployment benefits run out. And, will those receiving the benefits all of sudden have a job?

Tomorrow’s post will be my summary and predictions (for what it is worth!!)